Microfinance, Financial Literacy, and Household Power Configuration in Rural Bangladesh: An Empirical Study on Some Credit Borrowers

Abstract

The paper explores the impact of microfinance on multidimensional constructs of empowerment and the catalysts thereof. The reference point for analysis in the paper is the women microfinance borrowers' self perception about their life transmutation as well as that of household power configuration. Unlike other recent research papers on the topic that focus on women's economic empowerment, this paper focuses on both economic and socio-cultural empowerment. The paper is based on both primary and secondary data. Qualitative primary data were collected from women beneficiaries of microfinance in Bangladesh. This paper argues that microfinance can be a useful empowerment tool that can transmute women's economic position and power relationships, but only when combined with financial literacy. It concludes that financial literacy is more important than access to credit and should be the focus of all future microfinance programs.Résumé L'article explore les conséquences de la microfinance sur la notion multidimensionnelle de l'autonomisation et les catalyseurs de celle-là. Le point de référence de l'analyse dans cet article est la propre perception des femmes emprunteuses de la microfinance sur leur transmutation de la vie ainsi que celle de la configuration de l'alimentation domestique. Contrairement à d'autres travaux de recherche récents sur le sujet portant sur l'autonomisation économique des femmes, ce document s'intéresse à l'autonomisation économique et socioculturelle. Cet article repose sur des données primaires et secondaires. Les données primaires qualitatives ont été recueillies auprès de femmes bénéficiaires de la microfinance au Bangladesh. L'article affirme que la microfinance peut être un outil d'autonomisation utile, capable de transformer la situation économique des femmes et les Resumen El presente documento explora el impacto de las microfinanzas sobre el constructo multidimensional del empoderamiento y los catalizadores del mismo. El punto de referencia del análisis en este documento es la propia percepción de las prestatarias de microfinanzas sobre su transmutación vital así como también la de la configuración del poder doméstico. Al contrario que otros trabajos de investigación sobre el tema que se centran en el empoderamiento económico de las mujeres, el presente documento se centra tanto en el empoderamiento económico como en el empoderamiento sociocultural. El documento se basa tanto en datos primarios como secundarios. Los datos primarios cualitativos fueron recopilados a partir de beneficiarias de microfinanzas en Bangladesh. El documento argumenta que las microfinanzas pueden ser una herramienta de empoderamiento útil que puede transmutar la posición económica de las mujeres y las relaciones de poder, pero sólo con conocimiento financiero. Concluye que el conocimiento financiero es más importante que el acceso al crédito y debe ser el foco de atención de todos los futuros programas de microfinanzas.

Economic Cognitions Among Older Adults: Parental Socialization Predicts Financial Planning for Retirement

“…Accordingly, one of the possible mediators is financial literacy. This consists of the skill to read, manage and analyze the personal finances that have an impact on one’s financial well-being (Nawaz, 2015 ). We know that receiving financial education can improve both financial behavior and literacy since empirical results in this regard have been found.…”

Financial Literacynin Women Empowerment

“…In contrast, the minimalist approach states that credit access without too many requirements is exactly what women need to empower them. In addition to these two approaches, financial literacy can also be considered as a reference to participate in supporting the success of microfinance activities (Nawaz, 2015). Through financial literacy, individuals are expected to have a broader understanding of the use of money (from family income and microfinance) for productive purposes, to be self-sufficient in making money effectively and efficiently, to store their savings, to advise husbands and other family members concerning economic activities, and also to provide advice on the overall state of family finance.…”

“…The research results obtained in India, particularly in the Nilgiri region, indicate that poverty reduction by implementing microfinance is influenced by several factors such as age, marital status, education, employment, family type, timeframe for members of savings and loan groups, weekly contribution to groups, the amount of the loan received, the return schedule, the adequacy of capital, the timely receipt of the loan, the period of running the business, and monthly income of the business (Jeyarathnam M and Kamalaveni, 2013:43-44). Moreover, results and impact on women empowerment through microfinance depended on the cultural, social, economic and political circumstances of a region or country (Mayoux, 2005), as observed to have happened in India (Sengupta, 2013), (Kumar, 2013), (Maity & Sarania, 2017), Guatemala (Beck, 2017), and Bangladesh (Nawaz, 2015). In addition to some of the issues mentioned earlier regarding factors that influence women's empowerment through microfinance, financial literacy is also to be considered (Bay, Catasús, & Johed, 2014: 43).…”

“…Financial literacy is simply deemed to have an impact on the financial capacity of a society. When it comes to microfinance, it can be a considerable factor in the success of microfinance (Nawaz, 2015(Nawaz, : 1102.…”

<p>Analysis of Civic Initiatives: Multiparameter Classification of Social Innovations</p>

“…The vast majority of social innovations presented at the international level are conducted without state involvement. Meanwhile, social and innovative projects with state participation tend to be implemented directly at national and regional levels (Nawaz, 2015). The example of participatory budgeting in Porto Alegre may serve as a model here, since it represents a novel decision-making mechanism involving the population in budgeting decisions.…”